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Drive home value of advice

As we wait for the next pronouncement on the retail distribution review, the issue of adviser competence is still very much on the agenda.

In the Budget, changes to pension tax relief and the increase in higher-rate tax has certainly made good arithmetic skills a prerequisite for the professional adviser.

We now have a sliding scale for higher-rate relief for the high earner and the end to higher-rate relief through the code number, which will make salary sacrifice even more attractive, subject to the new contribu- tion ceiling. This is the time to understand the full ramifications of these changes and get those calculation routines honed and ready to go.

Having said all that, the ability to calculate will pale into insignificance with the need to communicate taxation issues and the impact of these changes.

Many years ago, there was a proposal for more graphical communication to be included in the key features document. This was filed in the bin, to my eternal regret.

But there is a positive side. If you find them a bind, just think how grateful clients will be for bringing this increase in tax to their attention, with sufficient time to mitigate it.

In short, complexity is the professional adviser’s friend and we have a major opportunity to drive home the value of advice. No one likes tax but in this scenario its very much our ally.

Last but not least, this is one day when being over 50 is not so bad, even if only due to a higher Isa allowance.

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